Technology change as a policy response to promote changes in land management for environmental benefits

A previous study developed a framework for choosing among groups of policy mechanisms for encouraging environmentally beneficial land-use change. The framework highlights that these choices should depend on the relative levels of private (or internal) net benefits, and public (or external) net benefits. Incentive-based mechanisms (polluter-pays and/or beneficiary-pays) and extension need to be targeted carefully to appropriate projects-where private net benefits are close to zero, and/or public net benefits are more extremely positive or negative. This article focuses on policy mechanisms that alter the net benefits of changing land management, including R&D to develop new technologies, and training to improve the skill of landholders at using existing technologies. These policy options are now treated more comprehensively within the public benefits: private benefits framework. Benefits of technology-change projects can include reductions in the opportunity cost of compliance with environmental programs, increases in the public benefits of a particular type of land-use change, or improvements in private net benefits, resulting in public benefits through greater or more rapid adoption by private landholders. From an environmental management perspective, technology development is most relevant where public net benefits of land use change are positive and private net benefits are negative, but not highly negative. There is a set of projects for which technology change is the only viable alternative to no action, highlighting the importance of technology change in these cases. Copyright (c) 2009 International Association of Agricultural Economists.